PHOENIX, April 3 (Reuters) - Arizona's Republican Governor Jan Brewer signed into law on Tuesday a bill to ban medical marijuana from being used on the campuses of state universities and community colleges in the latest salvo in a long-running battle over legalization of the drug.

Arizona's move to bar the drug's use on campus is the latest in a drive to roll back laws legalizing the therapeutic use of marijuana, which remains classified as an illegal narcotic under U.S. federal law.

Supporters said the Arizona law was designed to protect federal funding for institutions of higher education, which they said was at threat if medical marijuana use was allowed in state schools.

"With the health and safety of Arizona's students, as well as literally hundreds of millions of dollars at stake, this legislation is critically necessary," State Representative Amanda Reeve, a Republican, said in a statement.

"Our children and adult students are far too important to risk. I'm proud to say we acted swiftly and decisively when confronted by this obvious concern," she added.

The measure sailed through the state legislature with bipartisan support. The law, due to take effect this summer, is expected to face a legal challenge by medical marijuana proponents.

Arizona voters passed a medical marijuana measure by a razor-thin margin in 2010, and the state is among 16, plus Washington, D.C., with some sort of legalized medical-marijuana statutes, according to the National Drug Policy Alliance.

Reeve said more than $666 million in federal dollars could be jeopardized if Arizona allowed medical marijuana on its higher education campuses. Matthew Benson, a spokesman for Brewer, said that the drug has "no place on a college campus."

"Marijuana remains a federal controlled substance, regardless of whether it is being used as a medicinal agent," Benson said.

The Arizona move comes as the federal government has sought in recent months to shut down storefront medical weed shops and greenhouses in California and other mostly Western states deemed by federal investigators to be serving as drug-trafficking fronts, as well as those located near schools and parks.

On Monday, U.S. federal agents in California raided a San Francisco Bay-area college known as the "Princeton of Pot" and briefly detained its founder. The school, Oaksterdam University, offers courses in growing and dispensing marijuana.

Federal authorities have also intensified their crackdown in Colorado and Washington state, where voters will be deciding in ballot initiatives in November whether to make those states the first to legalize marijuana for recreational use. (Additional reporting by Tim Gaynor; Editing by Cynthia Johnston)